The Political cost of reforms

This paper formalizes in a fully-rational model the popular idea that politicians perceive an electoral cost in adopting costly reforms with future benefits and reconciles it with the evidence that reformist governments are not punished by voters. To do so, it proposes a model of elections where political ability is ex-ante unknown and investment in reforms is unobservable. On the one hand, elections improve accountability and allow to keep well-performing incumbents. On the other, politicians make too little reforms in an attempt to signal high ability and increase their reappointment probability. Although in a rational expectation equilibrium voters cannot be fooled and hence reelection does not depend on reforms, the strategy of underinvesting in reforms is nonetheless sustained by out-of-equilibrium beliefs. Contrary to the conventional wisdom, uncertainty makes reforms more politically viable and may, under some conditions, increase social welfare. The model is then used to study how political rewards can be set so as to maximize social welfare and the desirability of imposing a one-term limit to governments. The predictions of this theory are consistent with a number of empirical regularities on the determinants of reforms and reelection. They are also consistent with a new stylized fact documented in this paper: economic uncertainty is associated to more reforms in a panel of 20 OECD countries.

Different approaches to modelling the cost-effectiveness of schistosomiasis control

This paper reviews three different approaches to modelling the cost-effectiveness of schistosomiasis control. Although these approaches vary in their assessment of costs, the major focus of the paper is on the evaluation of effectiveness. The first model presented is a static economic model which assesses effectiveness in terms of the proportion of cases cured. This model is important in highlighting that the optimal choice of chemotherapy regime depends critically on the level of budget constraint, the unit costs of screening and treatment, the rates of compliance with screening and chemotherapy and the prevalence of infection. The limitations of this approach is that it models the cost-effectiveness of only one cycle of treatment, and effectiveness reflects only the immediate impact of treatment. The second model presented is a prevalence-based dynamic model which links prevalence rates from one year to the next, and assesses effectiveness as the proportion of cases prevented. This model was important as it introduced the concept of measuring the long-term impact of control by using a transmission model which can assess reduction in infection through time, but is limited to assessing the impact only on the prevalence of infection. The third approach presented is a theoretical framework which describes the dynamic relationships between infection and morbidity, and which assesses effectiveness in terms of case-years prevented of infection and morbidity. The use of this model in assessing the cost-effectiveness of age-targeted treatment in controlling Schistosoma mansoni is explored in detail, with respect to varying frequencies of treatment and the interaction between drug price and drug efficacy.

Energy cost of walking and gait instability in healthy 65- and 80-yr-olds.

This study tested whether the lower economy of walking in healthy elderly subjects is due to greater gait instability. We compared the energy cost of walking and gait instability (assessed by stride to stride changes in the stride time) in octogenarians (G80, n = 10), 65-yr-olds (G65, n = 10), and young controls (G25, n = 10) walking on a treadmill at six different speeds. The energy cost of walking was higher for G80 than for G25 across the different walking speeds (P < 0.05). Stride time variability at preferred walking speed was significantly greater in G80 (2.31 +/- 0.68%) and G65 (1.93 +/- 0.39%) compared with G25 (1.40 +/- 0.30%; P < 0.05). There was no significant correlation between gait instability and energy cost of walking at preferred walking speed. These findings demonstrated greater energy expenditure in healthy elderly subjects while walking and increased gait instability. However, no relationship was noted between these two variables. The increase in energy cost is probably multifactorial, and our results suggest that gait instability is probably not the main contributing factor in this population. We thus concluded that other mechanisms, such as the energy expenditure associated with walking movements and related to mechanical work, or neuromuscular factors, are more likely involved in the higher cost of walking in elderly people.

In vitro and in vivo experimental models for drug screening and development for Chagas disease

Chagas disease, a neglected illness, affects nearly 12-14 million people in endemic areas of Latin America. Although the occurrence of acute cases sharply has declined due to Southern Cone Initiative efforts to control vector transmission, there still remain serious challenges, including the maintenance of sustainable public policies for Chagas disease control and the urgent need for better drugs to treat chagasic patients. Since the introduction of benznidazole and nifurtimox approximately 40 years ago, many natural and synthetic compounds have been assayed against Trypanosoma cruzi, yet only a few compounds have advanced to clinical trials. This reflects, at least in part, the lack of consensus regarding appropriate in vitro and in vivo screening protocols as well as the lack of biomarkers for treating parasitaemia. The development of more effective drugs requires (i) the identification and validation of parasite targets, (ii) compounds to be screened against the targets or the whole parasite and (iii) a panel of minimum standardised procedures to advance leading compounds to clinical trials. This third aim was the topic of the workshop entitled Experimental Models in Drug Screening and Development for Chagas Disease, held in Rio de Janeiro, Brazil, on the 25th and 26th of November 2008 by the Fiocruz Program for Research and Technological Development on Chagas Disease and Drugs for Neglected Diseases Initiative. During the meeting, the minimum steps, requirements and decision gates for the determination of the efficacy of novel drugs for T. cruzi control were evaluated by interdisciplinary experts and an in vitro and in vivo flowchart was designed to serve as a general and standardised protocol for screening potential drugs for the treatment of Chagas disease.

Federalism and Welfare to Work in Switzerland: The Development of Active Social Policies in a Fragmented Welfare State

This article is concerned with the impact that federal structures have on the development of welfare to work or activation policies. More precisely, it argues that the incentives and the risks associated with a division of responsibilities among different jurisdictions may constitute an obstacle to broad reforms that promote labor market participation of nonworking benefit recipients. This argument is illustrated with a case study discussing policy responses to a massive rise in caseloads among social assistance recipients in Switzerland. We conclude that the lack of a fundamental reform was the consequence of the incentives provided by the federal structure of the program. These incentives have both encouraged cost shifting among jurisdictions and discouraged involvement of federal level policy makers in a bigger reform.

Health literacy [Document électronique] : an economic perspective and data for Switzerland. Part 2, A review of health literacy measures and a cost assessment of limited health literacy

Summary : 1. Measuring health literacy in Switzerland: a review of six surveys: 1.1 Comparison of questionnaires - 1.2 Measures of health literacy in Switzerland - 1.3 Discussion of Swiss data on HL - 1.4 Description of the six surveys: 1.4.1 Current health trends and health literacy in the Swiss population (gfs-UNIVOX), 1.4.2 Nutrition, physical exercise and body weight : opinions and perceptions of the Swiss population (USI), 1.4.3 Health Literacy in Switzerland (ISPMZ), 1.4.4 Swiss Health Survey (SHS), 1.4.5 Survey of Health, Ageing and Retirement in Europe (SHARE), 1.4.6 Adult literacy and life skills survey (ALL). - 2 . Economic costs of low health literacy in Switzerland: a rough calculation. Appendix: Screenshots cost model

Cost-effectiveness analysis of the first-line therapies for nicotine dependence.

BACKGROUND: Nicotine dependence is the major obstacle for smokers who want to quit. Guidelines have identified five effective first-line therapies, four nicotine replacement therapies (NRTs)--gum, patch, nasal spray and inhaler--and bupropion. Studying the extent to which these various treatments are cost-effective requires additional research. OBJECTIVES: To determine cost-effectiveness (CE) ratios of pharmacotherapies for nicotine dependence provided by general practitioners (GPs) during routine visits as an adjunct to cessation counselling. METHODS: We used a Markov model to generate two cohorts of one-pack-a-day smokers: (1) the reference cohort received only cessation counselling from a GP during routine office visits; (2) the second cohort received the same counselling plus an offer to use a pharmacological treatment to help them quit smoking. The effectiveness of adjunctive therapy was expressed in terms of the resultant differential in mortality rate between the two cohorts. Data on the effectiveness of therapies came from meta-analyses, and we used odds ratio for quitting as the measure of effectiveness. The costs of pharmacotherapies were based on the cost of the additional time spent by GPs offering, prescribing and following-up treatment, and on the retail prices of the therapies. We used the third-party-payer perspective. Results are expressed as the incremental cost per life-year saved. RESULTS: The cost per life-year saved for only counselling ranged from Euro 385 to Euro 622 for men and from Euro 468 to Euro 796 for women. The CE ratios for the five pharmacological treatments varied from Euro 1768 to Euro 6879 for men, and from Euro 2146 to Euro 8799 for women. Significant variations in CE ratios among the five treatments were primarily due to differences in retail prices. The most cost-effective treatments were bupropion and the patch, and, then, in descending order, the spray, the inhaler and, lastly, gum. Differences in CE between men and women across treatments were due to the shape of their respective mortality curve. The lowest CE ratio in men was for the 45- to 49-year-old group and for women in the 50- to 54-year-old group. Sensitivity analysis showed that changes in treatment efficacy produced effects only for less-well proven treatments (spray, inhaler, and bupropion) and revealed a strong influence of the discount rate and natural quit rate on the CE of pharmacological treatments. CONCLUSION: The CE of first-line treatments for nicotine dependence varied widely with age and sex and was sensitive to the assumption for the natural quit rate. Bupropion and the nicotine patch were the two most cost-effective treatments.

How robust are global conservation priorities to climate change?

International conservation organisations have identified priority areas for biodiversity conservation. These global-scale prioritisations affect the distribution of funds for conservation interventions. As each organisation has a different focus, each prioritisation scheme is determined by different decision criteria and the resultant priority areas vary considerably. However, little is known about how the priority areas will respond to the impacts of climate change. In this paper, we examined the robustness of eight global-scale prioritisations to climate change under various climate predictions from seven global circulation models. We developed a novel metric of the climate stability for 803 ecoregions based on a recently introduced method to estimate the overlap of climate envelopes. The relationships between the decision criteria and the robustness of the global prioritisation schemes were statistically examined. We found that decision criteria related to level of endemism and landscape fragmentation were strongly correlated with areas predicted to be robust to a changing climate. Hence, policies that prioritise intact areas due to the likely cost efficiency, and assumptions related to the potential to mitigate the impacts of climate change, require further examination. Our findings will help determine where additional management is required to enable biodiversity to adapt to the impacts of climate change

Cost-effectiveness of opportunistic versus organised mammography screening in Switzerland

BACKGROUND: Various centralised mammography screening programmes have shown to reduce breast cancer mortality at reasonable costs. However, mammography screening is not necessarily cost-effective in every situation. Opportunistic screening, the predominant screening modality in several European countries, may under certain circumstances be a cost-effective alternative. In this study, we compared the cost-effectiveness of both screening modalities in Switzerland. METHODS: Using micro-simulation modelling, we predicted the effects and costs of biennial mammography screening for 50-69 years old women between 1999 and 2020, in the Swiss female population aged 30-70 in 1999. A sensitivity analysis on the test sensitivity of opportunistic screening was performed. RESULTS: Organised mammography screening with an 80% participation rate yielded a breast cancer mortality reduction of 13%. Twenty years after the start of screening, the predicted annual breast cancer mortality was 25% lower than in a situation without screening. The 3% discounted cost-effectiveness ratio of organised mammography screening was euro11,512 per life year gained. Opportunistic screening with a similar participation rate was comparably effective, but at twice the costs: euro22,671-24,707 per life year gained. This was mainly related to the high costs of opportunistic mammography and frequent use of imaging diagnostics in combination with an opportunistic mammogram. CONCLUSION: Although data on the performance of opportunistic screening are limited, both opportunistic and organised mammography screening seem effective in reducing breast cancer mortality in Switzerland. However, for opportunistic screening to become equally cost-effective as organised screening, costs and use of additional diagnostics should be reduced.

¿Es posible reducir el gasto sanitario a través del subsidio a los seguros sanitarios privados? La doble cobertura sanitaria en Catalunya. Estimación de patrones de utilización de servicios sanitarios y simulación de costes asociados a la asistencia sanit

The objective of this study consists in quantifying in money terms the potential reduction in usage of public health care outlets associated to the tenure of double (public plus private) insurance. In order to address the problem, a probabilistic model for visits to physicians is specified and estimated using data from the Catalonian Health Survey. Also, a model for the marginal cost of a visit to a physician is estimated using data from a representative sample of fee-for-service payments from a major insurer. Combining the estimates from the two models it is possible to quantify in money terms the cost/savings of alternative policies which bear an impact on the adoption of double insurance by the population. The results suggest that the private sector absorbs an important volume of demand which would be re-directed to the public sector if consumers cease to hold double insurance.

Detection of Optimal Models in Parameter Space with Support Vector Machines

The paper proposes an approach aimed at detecting optimal model parameter combinations to achieve the most representative description of uncertainty in the model performance. A classification problem is posed to find the regions of good fitting models according to the values of a cost function. Support Vector Machine (SVM) classification in the parameter space is applied to decide if a forward model simulation is to be computed for a particular generated model. SVM is particularly designed to tackle classification problems in high-dimensional space in a non-parametric and non-linear way. SVM decision boundaries determine the regions that are subject to the largest uncertainty in the cost function classification, and, therefore, provide guidelines for further iterative exploration of the model space. The proposed approach is illustrated by a synthetic example of fluid flow through porous media, which features highly variable response due to the parameter values' combination.

Business Cycles, Unemployment Insurance, and the Calibration of Matching Models

This paper points out an empirical puzzle that arises when an RBC economy with a job matching function is used to model unemployment. The standard model can generate sufficiently large cyclical fluctuations in unemployment, or a sufficiently small response of unemployment to labor market policies, but it cannot do both. Variable search and separation, finite UI benefit duration, efficiency wages, and capital all fail to resolve this puzzle. However, both sticky wages and match-specific productivity shocks help the model reproduce the stylized facts: both make the firm's flow of surplus more procyclical, thus making hiring more procyclical too.

Electoral Platforms, Implemented Policies, and Abstention

Recent studies of American politics evidence that political polarization of both the electorate and the political elite have moved 'almost in tandem for the past half century' (McCarty et al., 2003, p.2), and that party polarization has steadily increased since the 1970s. On the other hand, the empirical literature on party platforms and implemented policies has consistently found an imperfect but nonnegligible correlation between electoral platforms and governmental policies: while platforms tend to be polarized, policies are moderate or centrist. However, existing theoretical models of political competition are not manifestly compatible with these observations. In this paper, we distinguish between electoral platforms and implemented policies by incorporating a non-trivial policy-setting process. It follows that voters may care not only about the implemented policy but also about the platform they support with their vote. We find that while parties tend to polarize their positions, the risk of alienating their constituency prevents them from radicalizing. The analysis evidences that the distribution of the electorate, and not only the (expected) location of a pivotal voter, matters in determining policies. Our results are consistent with the observation of polarized platforms and moderate policies, and the alienation and indifference components of abstention.

¿Es posible reducir el gasto sanitario a través del subsidio a los seguros sanitarios privados? La doble cobertura sanitaria en Catalunya. Estimación de patrones de utilización de servicios sanitarios y simulación de costes asociados a la asistencia

The objective of this study consists in quantifying in money terms thepotential reduction in usage of public health care outlets associatedto the tenure of double (public plus private) insurance. In order to address the problem, a probabilistic model for visits to physicians is specified and estimated using data from the Catalonian Health Survey. Also, a model for the marginal cost of a visit to a physician is estimated using data from a representative sample of fee-for-service payments from a major insurer. Combining the estimates from the two models it is possible to quantify in money terms the cost/savings of alternative policies which bear an impact on the adoption of double insurance by the population. The results suggest that the private sector absorbs an important volumeof demand which would be re-directed to the public sector if consumerscease to hold double insurance.

Calibration of stochastic volatility models via second order approximation: the Heston model case

Using a suitable Hull and White type formula we develop a methodology to obtain asecond order approximation to the implied volatility for very short maturities. Using thisapproximation we accurately calibrate the full set of parameters of the Heston model. Oneof the reasons that makes our calibration for short maturities so accurate is that we alsotake into account the term-structure for large maturities. We may say that calibration isnot "memoryless", in the sense that the option's behavior far away from maturity doesinfluence calibration when the option gets close to expiration. Our results provide a wayto perform a quick calibration of a closed-form approximation to vanilla options that canthen be used to price exotic derivatives. The methodology is simple, accurate, fast, andit requires a minimal computational cost.